Mega Bank Annual Report 2017

39 Annual Report 2017 -39- MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF DOLLARS) For the years ended December 31, 2017 2016 NT$ US$ NT$ CASH FLOWS FROM OPERATING ACTIVITIES (Unaudited -Note 4) Consolidated income before income tax $ 24,303,042 $ 819,719 $ 23,115,368 Adjustments to reconcile consolidated income before tax to net cash provided by operating activities Income and expenses having no effect on cash flows Provision for loan losses and guarantee reserve 4,344,809 146,546 3,619,823 Depreciation 535,681 18,068 484,684 Amortization 6,039 204 5,695 Interest income ( 53,854,147 ) ( 1,816,451 ) ( 50,877,951 ) Dividend income ( 962,590 ) ( 32,467 ) ( 1,102,239 ) Interest expense 19,770,044 666,825 15,294,311 Investment income recognized under the equity method ( 208,567 ) ( 7,035 ) ( 227,118 ) Gain on disposal of property and equipment ( 1,262 ) ( 43 ) ( 1,142 ) Loss on asset impairment 205,179 6,920 334,397 Loss on retirement of property and equipment 32 1 253 Changes in assets/liabilities relating to operating activities Decrease in due from the Central Bank and call loans to banks 34,914,999 1,177,651 6,827,796 Decrease in financial assets at fair value through profit or loss 3,700,191 124,804 1,711,731 Decrease in receivables 756,477 25,515 83,835,911 (Increase) decrease in bills discounted and loans ( 50,940,398 ) ( 1,718,173 ) 54,310,193 (Increase) decrease in available-for-sale financial assets ( 71,282,208 ) ( 2,404,284 ) 25,309,572 Increase in held-to-maturity financial assets ( 3,152,568 ) ( 106,333 ) ( 79,762,628 ) Increase in other financial assets ( 569,362 ) ( 19,204 ) ( 125,878 ) Increase in other assets ( 1,258,431 ) ( 42,446 ) ( 184,024 ) Decrease in due to the Central Bank and commercial banks ( 15,027,383 ) ( 506,860 ) ( 33,859,832 ) Decrease in financial liabilities at fair value through profit or loss ( 2,618,914 ) ( 88,334 ) ( 10,545,055 ) Increase (decrease) in securities sold under repurchase agreements 403,447 13,608 ( 103,120 ) Increase (decrease) in payables 2,769,707 93,420 ( 3,585,879 ) Increase (decrease) in deposits and remittances 215,620,576 7,272,685 ( 61,625,990 ) Increase (decrease) in other financial liabilities 385,652 13,008 ( 89,234 ) Increase in reserve for employee benefit liabilities 159,054 5,365 45,482 Decrease in other liabilities ( 37,890 ) ( 1,278 ) ( 3,085,629 ) Interest received 53,001,824 1,787,703 50,650,521 Dividend received 1,117,711 37,699 1,261,175 Interest paid ( 19,150,338 ) ( 645,923 ) ( 15,507,830 ) Income tax paid ( 3,882,373 ) ( 130,949 ) ( 4,473,792 ) Net cash provided by operating activities 139,048,033 4,689,961 1,649,571 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of investments under the equity method - - 2,747 Proceeds from capital reduction of financial assets carried at cost 387,056 13,055 193 Acquisitions of property and equipment ( 867,567 ) ( 29,262 ) ( 466,857 ) Proceeds from disposal of property and equipment 6,621 223 1,799 Net cash used in investing activities ( 473,890 ) ( 15,984 ) ( 462,118 ) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in borrowed funds ( 6,516,867 ) ( 219,808 ) ( 5,484,667 ) Increase (decrease) in deposits received 1,199,013 40,442 ( 633,181 ) Payments of cash dividends ( 12,804,350 ) ( 431,879 ) ( 12,804,350 ) Decrease in financial bonds payable ( 10,300,000 ) ( 347,409 ) - Net cash (used in) provided by financing activities ( 28,422,204 ) ( 958,654 ) ( 18,922,198 ) EFFECT OF EXCHANGE RATE CHANGES ( 1,754,597 ) ( 59,179 ) ( 1,238,798 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 108,397,342 3,656,144 ( 18,973,543 ) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 423,036,592 14,268,638 442,010,135 CASH AND CASH EQUIVALENTS, END OF YEAR $ 531,433,934 $ 17,924,782 $ 423,036,592 CASH AND CASH EQUIVALENTS COMPOSITION: Cash and cash equivalents shown in consolidated balance sheet $ 137,710,247 $ 4,644,841 $ 90,426,546 Due from the Central Bank and call loans to bank meeting the definition of cash and cash equivalents as stated in IAS No. 7 "Cash Flow Statements" 392,026,101 13,222,683 328,354,078 Securities purchased under resale agreements meeting the definition of cash and cash equivalents as stated in IAS No. 7 "Cash Flow Statements" 1,697,586 57,258 4,255,968 CASH AND CASH EQUIVALENTS, END OF YEAR $ 531,433,934 $ 17,924,782 $ 423,036,592 The accompanying notes are an integral part of these financial statements.